Genius Brands International Inc (GNUS)

[rickn23]

I posted a link directly to the letter. I should have been more clear with the link.

Edit: link to the blog post containing the shareholder letter, also: Genius Brands CEO Annual Letter
https://www.gnusbrands.com/blog/post/6315/genius-brands-ceo-annual-letter



I don't believe the recent share price action was technical.

There were a lot of people buying GNUS believing a movie deal or buyout (@ $5-$15 per share) with/by Marvel was going to happen. Yesterday's press release added (minor) clarity, that Marvel was merely licensing Stan Lee's likeness for their own projects. No movie deal, no buyout. Sell-off. The press release was also vague on details, despite Andy saying disclosure would happen.

Today's sell off is a continuation, possibly made a bit worse by Andy saying (in the newsletter) that GNUS will not focus on revenue and earnings (key metrics for shareholders). It's not something shareholders like hearing. It's an indication GNUS will be spending a lot of money generating losses for the foreseeable future.

Andy also said GNUS has about $140 million in cash. My estimates are, GNUS should have about $150 million, indicating real money spent (vs paper losses) are higher than expected.

Also, Andy mentions the $2.37 warrants, as though he expects those to be converted. GNUS's share price is below the conversion price. The only reason to convert those shares, would be to cover shares shorted at much higher prices, something Andy would have to know about when writing this letter.

Also, GNUS (just?) paid off their PPP loan. It's an admission that Andy was mis-leading shareholders (most of last year) when he kept repeating that GNUS was debt free. It's something that might help plaintiffs in the class action lawsuit.

Edit
And no more Mattel Rainbow Rangers toys. Vanished in a puff of vapor. All those prototypes shown, never to be delivered.